Nash and Joe are in hot pursuit in Joe's BMW because the 'Cuda is in the shop. The car chase comes to a halt at the end of a pier - the cornered felon then whips out a grenade launcher and fires it at Nash and Joe, blowing up Joe's car. Nash and Joe return fire, ventilating the felon.
The weapon used in the chase turns out to be FBI property, and Special Agent David Katz is called in. Nash and Joe realize that the Bureau is not aware of its lost property, and Katz pleads for the (Special Investigation Unit) SIU's help. Katz is on the spot because Katz has personally lost the FBI Suburban van loaded with weapons like grenade launchers, submachineguns, ammunition, and body armor.
Two car thieves - Miles and Vaughn, have acquired the weapons. Miles and Vaughn attempt to sell the weapons to Asian gang members. The deal goes sour, and three gang members are killed. The SIU is on the trail of the car thieves via Dana the Wheelman, a disabled car thief in a wheelchair, specializing in re-keying stolen autos. Dana leads Nash and Joe to Michelle, supposedly a car booster.
Michelle turns out to be an undercover officer working to bust the auto theft ring. Agent Katz shows up, but makes matters worse. Nash secures Michelle's help by promising her credit for Miles and Vaughns' arrest; Michelle gives them the whereabouts of Miles and Vaughn. Just as the SIU is about to arrest Miles and Vaughn at their favorite restaurant, Agent Katz interferes and the two car thieves manage to escape.
Meanwhile, Joe sets up a blind date for Nash. Joe has a nanny for his baby girl Lucia, but the homesick nanny, Mary Tadd Butler, is about to leave her job to return to her home in Georgia. Joe schemes to have Nash romance her, giving Mary Tadd reason to stay. All goes well, as Nash takes a liking to Mary Tadd. Evan discovers how Agent Katz has lost the FBI van - Katz was having secret trysts at a motel and lost the FBI vehicle in the parking lot - the couple have been caught on security camera videotape.
The three bodies of the Asian gang members are found by Evan and Harvey. Michelle's cover is in jeopardy as she encounters Miles and Vaughn, who suspect she is an informant. Michelle again sets up Miles and Vaughn at the request of Nash. This time, Evan and Harvey are to go undercover as weapon dealers. Once again, Agent Katz interferes and blows his cover by accidentally bumping into Miles and Vaughn, along with Michelle, in an elevator on their way to meet Evan and Harvey. Agent Katz and Michelle are taken hostage by Miles and Vaughn, as they all flee in a jeep. Nash and Joe intercept in the 'Cuda, stopping the jeep. Nash lets Michelle arrest Miles and Vaughn as agreed upon, and Agent Katz gets his weapons back.
Nash blackmails Agent Katz when they dicker about the hotel bills for the undercover operation, and Nash gets Katz to give up his Mercedes Benz (a car confiscated in a drug operation) in replacement for Joe's totaled BMW. Mary Tadd says good-bye to Nash much to the regret of Joe, who is losing his nanny.
For more, see commentary for Episode 32